S&P trims Visual Comfort

S&P said it lowered its ratings on VC GB Holdings I Corp. (Visual Comfort & Co.) and its first-lien term loan to B- from B. The recovery rating remains , indicating meaningful recovery (50%-70%; rounded estimate: 55%) in default. The agency also trimmed the rating on the second-lien term loan to CCC from CCC+. The recovery rating remains 6, indicating negligible recovery (0%-10%; rounded estimate: 0%).

“The downgrade reflects Visual Comfort's higher-than-expected leverage and weakened operating cash flow. We estimate S&P Global Ratings-adjusted leverage of about 8x for the 12 months ended Dec. 31, 2021; compared to our expectation of about 7x for 2021, made at the time of the leveraged buyout in July 2021,” the agency said in a press release.

S&P noted it sees the company’s profitability improving this year but forecasts leverage will remain above 6.5x in fiscal years 2022 and 2023.

The outlook is stable.

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